More than 3,000 travel agencies to shut for one day with demands including that Indian airlines pay commission on tickets sold by agents.
India travel agents to strike against airlines
MUMBAI // Thousands of travel agents in India are set to go on strike today in protest of "unethical practices" by airlines.
More than 3,000 travel agencies are expected to shut for one day. Their demands include one for commissions that all Indian airlines should pay to agents on tickets they sell and another that the government should regulate fares to prevent carriers from gouging customers during peak travel seasons, according to the Travel Agents Association of India (Taai).
"The nationwide 'shutter down' is called to safeguard the interest of citizens of India against the unethical practices adopted by Indian and foreign airlines operating in and out of India," Taai said in a statement.
The association said that only two Indian airlines - Jet Airways and Air India - were paying commission, of just 1 per cent, to travel agents in India, while other carriers did not pay any commission on tickets.
"The situation in India today is very alarming," said Iqbal Mulla, the president of Taai. "We don't want our travel agent community to perish. Everybody is bleeding. They are not making money at the moment. Their overheads have gone up."
He said that the negative impact on the travel agency industry would in turn have a detrimental impact on India's tourism sector and the country's economy.
Indian airlines have struggled with profitability amid high operating costs. Kingfisher Airlines, which never managed to turn a profit, has been grounded since October.
Last year, India's domestic air travel market contracted by 2.1 per cent, partly because of high taxes on fuel, according to the International Air Transport Association.
The aviation ministry last week revealed that Indian airlines would be allowed to charge additional fees for services such as choosing a preferred seat in advance, a step which Taai is also challenging.
Nasrulla Tejani, the managing director of Equino Fun Holidays, a travel agency based in Mumbai, is supporting the strike.
"Over about the past six years the commission has been reduced," Mr Tejani explained.
"Earlier, the commission was 9 per cent; then it became 7 per cent; then 5 per cent; then it became 3 per cent; and some airlines reduced it to zero and some airlines are paying 1 per cent."
This had eroded revenues for his company from air tickets, he said, adding that his agency was increasingly focusing on selling complete holidays to compensate for the lost income.
He explained that travel agents could make some money on sales from airlines by getting a "productivity-linked bonus" at the end of the year if they achieved a certain target, while corporates paid a service fee to agents.
"Travel agents' profits are eroding," Mr Tejani said. "They're not able to pay their staff well. It's a challenge. The travel agents are suffering."